The attachment is encoded as Base64 in the XML so no conversion is required.
Does your Web service take the entire XML as a string? Or is it parameterized?
Best practice is to make it loosely coupled, i.e. take the entire XML as a string. No parameter validation needed because InfoPath won't submit an invalid form anyway.
Qdabra's DBXL Web service is a great example of the loosely couple approach. Supports all data types: images, attachments, rich text, hotdogs ... you name it!
:)